Interest rates on hold but a hike in child care cost looms

A looming hike in child care costs has sparked a warning shot from the Government as it moves to ram its key budget measures through the Parliament, in spite of Opposition stalling tactics.

Transcript

LEIGH SALES, PRESENTER: Official interest rates are on hold but other expenses are still heading skywards. The Federal Government is grateful for today's decision by the Reserve Bank, and economists predict that steady rates could be here to stay for the next few months at least.

But a looming hike in childcare costs has triggered a warning shot from the government as it moves to ram its key budget measures through the parliament, in spite of opposition stalling tactics.

SU-LIN ONG, RBC CAPITAL MARKETS: The RBA's telling us that rates are probably on hold for the foreseeable future, but it's a message that's caveated, it's premised very much on the signs that we've seen of moderation in early 2008 continuing.

HAYDEN COOPER: Some figures have bucked the trend. A four month decline in residential building approvals is over. But the almost 8 per cent increase has been met with scepticism.

SU-LIN ONG: The increase has come from a volatile apartments component, the underlying trend really hasn't changed, it continues to be in negative territory, reflecting some real challenges for the housing sector.

KEVIN RUDD: This will be a fifteen round fight, it's gonna go for a long time, there's no knockout blow when it comes to inflation."

HAYDEN COOPER: Especially not in the child care sector. Many operators will increase their charges from next month.

AMANDA MORPHETT, CHILDCARE ASSOCIATIONS AUSTRALIA: We're really not looking at more than two dollars a day on average for any service, across Australia actually.

HAYDEN COOPER: But an increase coinciding with a boosted child care rebate looks to some like a money grab.

JULIA GILLARD, DEPUTY PRIME MINISTER: The government will be watching prices and the government is indicating to operators that it will be watching to see.

HAYDEN COOPER: Watching doesn't cut it for the opposition.

BRENDAN NELSON: What powers was the Deputy Prime Minister referring to control child care costs?

JULIA GILLARD: You would also expect the government to be clear that it will canvass all options within its power should evidence of such pricing practices emerge.

BRENDAN NELSON: Is this power or a cup of tea?

TONY ABBOTT, OPPOSITION FAMILIES SPOKESMAN: The only power they've got is to alter the rate of subsidy and any suggestion that the subsidy should be reduced for child care centres that increase their fees above a certain percentage point will rip off parents.

HAYDEN COOPER: Emboldened by a stronger yet still unconvincing opinion poll, the opposition is preparing to put its Senate majority to use.

The parliament is sitting late and straining under more than 20 bills the government wants passed before the winter break. But Brendan Nelson is in no rush.

BRENDAN NELSON: Most of these bills do not have any sense of urgency about them, and for goodness sake, we live in a democracy.

HAYDEN COOPER: That means the coalition will stand in the way. It'll send some of the budget measures including Fuel Watch to a Senate inquiry. It's not what the government wants to hear.

LINDSAY TANNER, FINANCE MINISTER: We won't be diverted in our legislative program to put the budget into effect, by the short term naked sniping by the opposition.

ANTHONY ALBANESE, LEADER OF THE HOUSE: We make no apologies for the fact that we have a big legislative agenda.

WAYNE SWAN, TREASURER: I mean if we weren't putting them through the parliament they'd be saying we were doing nothing.

HAYDEN COOPER: Burning the midnight oil, literally.

JIM TUNOUR, LABOR MEMBER FOR LEICHHARDT: The lights have just gone out in Parliament House.

HAYDEN COOPER: Not even a late night power failure will stop the law making.

SPEAKER OF THE HOUSE: The Member for Leichhardt can continue his enlightening remarks.